Taxes are mandatory fees imposed by government agencies on individuals, final consumers, or commercial companies in a particular country or region.

Taxes are a good source of income for the government and help improve the financial situation as they are used to finance and support health and education services, maintain the country’s infrastructure, and provide public utility services; such as defense, education, infrastructure facilities, healthcare, etc.

It is necessary to note that each country has a responsible authority to manage and collect taxes. Anyone who tries to escape from paying taxes is legally punished because they are mandatory. In Saudi Arabia, the General Authority of Zakat and Income is the responsible authority to manage and collect taxes in Saudi Arabia.

Our Law Firm, Al Othman Lawyers and Consultants, provides a comprehensive range of legal services specializing in taxes, to support individuals and companies in managing their tax obligations and resolving disputes with the competent authorities. The taxes lawyer has extensive experience in providing accurate advice, strong legal representation, and ensuring full compliance with local and international tax laws. Our services are designed to reduce financial risks, balance legal compliance, and save time and effort for our clients.

Types of taxes in Saudi Arabia

The types of taxes imposed by the Kingdom of Saudi Arabia on residents on its territory vary depending on who pays them to achieve financial balance, and they are represented in two basic types, which are:

  • Direct taxes

These are taxes that aren’t transferred to another party other than the government due to the existence of laws regulating this type.

In other words, they are taxes that are paid directly to the government for various purposes. The classifications of direct taxes are:

  • Income tax

This type of direct tax is imposed on the income of individuals and institutions, which means that it is imposed on every business that manages money or on employee salaries and other things.

That is, it is imposed on:

  • A non-Saudi natural person who is a resident and practices the activity in the Kingdom.
  • A non-resident person who practices the activity in the Kingdom through a permanent establishment.
  • A non-resident person who has other taxable income from sources in the Kingdom.
  • A person who works in the field of natural gas investment.
  • A person who works in the production of oil and hydrocarbons.

The government deducts a part of the profits if they exceed a certain limit, and the value of the income tax increases in case the profits increase. 

  • Corporate Tax

Corporate tax is a tax imposed on the net profits of a company which is subject to the tax system with some modifications that differ from the taxes imposed on individuals.

This type of direct tax is also called capital tax and is imposed by the Saudi government on the capital or income of establishments established on the territory of the Kingdom.

  • Withholding tax

This type of direct tax is imposed on a person who is not a resident of the Kingdom of Saudi Arabia and who achieves income or benefit from a person residing in the Kingdom.

It is important to note that the non-resident who pays the amounts to obtain the service is responsible for deducting the tax amount and transferring it to the Zakat, Tax and Customs Authority.

  • Indirect taxes

These are taxes paid by a third party, which is usually a retail store.

That is taxes which are not paid directly to the government.

In other words:

Indirect taxes are not imposed on profits or income, but on sales of all goods and services, as the final consumer pays the tax percentage as part of the price of the commodity.

Indirect tax classifications include:

  • Value Added Tax

Value Added Tax is a tax imposed at every stage of the supply chain, starting from the purchase of raw materials by the factory, to the sale of the final product to the consumer by the retailer.

This type of indirect tax is imposed on all goods and services purchased and sold by establishments with some exceptions, as it is a basic source of income that contributes to strengthening the budgets of countries.

It is important to note that the consumer is the one who pays the cost of the value-added tax on the goods and services that he purchases, while establishments pay the value-added tax to the government, collected from consumer purchases, and establishments recover the value-added tax they paid to their suppliers.

We can refer to the goods and services exempt from value-added tax, which are:

  • Government education, and private education services about educational fees and school book fees.
  • All exports outside the Gulf Cooperation Council countries.
  • All services related to international transportation.
  • All government services.
  • Medical equipment and medicines specified by the Ministry of Health in Saudi Arabia.
  • Supplies of gold, silver, and platinum for investment purposes, with a rate of purity not less than 99%.
  • Supplies of Transportation and any other related services.
  • Selling and Renting residential properties.

  • Excise tax

This type of indirect tax is imposed on certain goods, including goods harmful to health such as tobacco and its derivatives in the Kingdom of Saudi Arabia.

Individuals must register with the General Authority of Zakat and Income if they want to import selective goods for tax purposes.

  • Customs duties and Excise fees

This type of tax is imposed on goods imported from outside the Kingdom of Saudi Arabia.

There is a set of bases that are taken into account during the customs valuation of goods imported from different countries. An example of these bases: 

The sale or price should not be linked to a specific condition or subject to consideration such that its value cannot be determined compared to the goods being valued.

The importance of taxes

  • Improving public services and facilities in the country.
  • And improving the lives of citizens and making them more comfortable,
  • In addition to improving the investment environment in the Kingdom to attract more institutions and companies to pump extensive investments into Saudi Arabia.
  • Taxes in Saudi Arabia mainly contribute to enhancing the government’s general revenues, which leads to increased spending on public interests and social services, such as education, health, and maintenance of basic infrastructure, and securing the social safety net; to achieve the social and economic goals of the state.
  • Taxes are considered one of the most important economic resources that governments around the world depend on to finance public services and achieve economic and social development.

Our expertise in taxes

  • Experiences related to resolving tax and zakat disputes

We have extensive experience in representing clients before tax and judicial authorities to resolve disputes related to taxes and zakat. We work to provide effective solutions that contribute to protecting clients’ rights and reducing financial burdens.

  • Experiences related to resolving tax evasion disputes

We provide legal support in cases related to tax evasion, including analyzing the legal position and providing the necessary defense before the relevant authorities, with a focus on reducing risks and ensuring compliance with regulations.

  • Special expertise in tax and zakat consulting

We are the ideal legal partner for resolving commercial disputes, whether related to partnerships, supply, or breach of contract. Our legal team provides comprehensive representation before the courts and works to provide legal advice to ensure the protection of our client’s interests and find effective and sustainable solutions.

  • Experiences in consulting related to income tax for foreign companies

Our team provides advanced expertise in representing clients in complex banking disputes, including cases related to loans, bank guarantees, and trade finance. We continue to provide comprehensive legal consultations to help clients resolve disputes and ensure the smooth continuity of their financial transactions.

  • Experiences related to preparing tax compliance plans

We help clients develop legal strategies that legally reduce tax liabilities without being exposed to risks. And review tax operations to ensure their compliance with local and international laws.

  • Experiences related to consultations on international tax agreements

We provide specialized legal consultations on international tax agreements concluded between the Kingdom and other countries. We help companies understand and implement these agreements to ensure compliance and avoid double taxation.

The importance of resorting to a tax expert

Tax Lawyers is a legal expert specializing in handling all tax-related issues, including providing legal advice, reviewing tax compliance, and managing disputes with tax entities. Tax lawyers help individuals and companies understand domestic and international tax laws, reduce financial risks associated with taxes, and ensure full compliance with legal regulations. It also provides strong legal support in cases of appeals and tax settlements, ensuring the protection of client’s rights and achieving the best results. It is important to have access to taxes lawyers: 

Disciplined compliance with tax regulations

Tax lawyers help inform clients of their tax assessments and other tax obligations as mandated by the client, and help them to comply with them correctly and effectively. 

Reduce tax burdens

Tax Advisor helps ease the tax burden on individuals and companies, providing legal advice on legal strategies and arrangements that can reduce outstanding tax amounts and improve the customer’s tax position. 

Avoid legal problems

The tax lawyer works to avoid legal problems related to taxation so that the tax lawyer can provide advice and advice on how to avoid tax evasion and indicate the most important legal measures necessary to comply with tax regulations, thereby reducing the risk of being suspected of tax evasion or other related legal problems. 

Strategic tax planning

Tax lawyer helps develop advanced tax strategies for companies and individuals. A tax lawyer also uses his expertise in tax systems and judicial practices to determine the best strategies that reduce tax receivable and improve the tax status of the client depending on his or her situation in which he or she is consulted. 

Legal defense

In the event of a tax dispute or tax investigation by the tax authorities, a tax lawyer can provide legal defense to the client. A tax lawyer protects the client’s rights and provides appropriate legal advice and legal representation in tax dispute proceedings. 

We are Al Othman’s team of legal experts specializing in dealing with all legal and judicial procedures related to tax issues, where we provide comprehensive solutions.

Our Tax Services

At Al Othman Law Firm, we provide integrated legal services in the field of taxation and zakat, including providing accurate advice on tax obligations, preparing compliance plans, and resolving disputes before competent women. Our team has extensive experience in dealing with complex issues such as tax evasion and the application of international tax agreements, as well as providing specialized income tax advice to foreign companies.

Our services are:

  • Resolving tax and cosmetic disputes 

We provide specialized legal advice in case of disputes with tax authorities to help resolve such disputes, whether through negotiation or legal proceedings. We are working to resolve tax evasion disputes.

  • Tax and cosmetic consulting

We provide you with the latest changes and developments in tax regulations to help you adjust your policy and strategies according to the latest developments.

  • Consultations on international tax agreements 

We provide legal advice on compliance with international tax legislation.

  • Income tax consulting for foreign companies 

It helps companies to file tax returns correctly and on time to ensure legal compliance. Consulting in business planning and investments to achieve tax preferences.

  • Prepare tax compliance plans

We provide legal advice on how to comply with all domestic tax regulations, including VAT and other taxes. We help companies develop effective tax strategies aimed at reducing the tax burden legally, which contributes to improving financial returns.

Why choose Al Othman Law Firm in tax cases?

Your choice means working with a dedicated legal team with extensive experience in all aspects of tax laws, offering innovative legal solutions tailored to the needs of individuals and companies. 

We are committed to protecting our customers’ rights and ensuring full compliance with domestic and international tax laws. Whether you are facing tax disputes, you need legal advice, or you are looking for ways to reduce your tax obligations, we are the legal partner you can trust to achieve the best results.

There are some clear reasons for why our Law Firm distinguishes itself from others

  • Deep experience in tax laws

We have a track record of working with individuals and companies to provide accurate tax legal advice and effective solutions. 

Our long years of experience in domestic and international tax laws enable us to address the most complex issues and ensure full compliance.

  • Dedicated Legal Advice

Each tax case needs a unique approach, so we offer legal strategies tailored to each customer’s needs and circumstances. 

We aim to maximize efficiency and reduce tax obligations in legal and safe ways.

  • Strong legal representation before the courts

We specialize in defending our clients before courts and tax bodies while ensuring that their rights are fully protected. 

Our team has high skills in providing evidence and managing issues to achieve the best possible results.

  • Obligation to comply with the law

We ensure that all legal procedures comply with domestic and international regulations, helping customers avoid penalties and legal risks. 

We constantly update our policies and services to keep pace with changes in tax systems.

  • Quick response and continuous support

We are committed to providing fast and effective legal support, with a team always available to answer inquiries and address emerging issues, giving our customers peace of mind and confidence in our services.

  • Reduce tax risk

We help our customers analyze their current tax situation and develop strategies that reduce tax liabilities in legal and safe ways, providing them with financial protection and legal stability.

Our expertise in taxes

  • We have provided specialized tax advice to the digital shipping company to ensure full compliance with the tax regulations related to digital commerce and electronic services, including VAT on digital transactions.
  • We have provided tax consulting in all business transactions of Trail Security including income tax and VAT on security services.
  • Commercial arbitration at the Dubai International Arbitration Centre between local partners and investors in a dispute worth more than 105 million rials.
  • We managed the tax requirements associated with Arabtec Jordana engineering projects including preparing tax returns and reviewing contracts to ensure compatibility with zakat and tax laws.
  • We provided comprehensive tax consulting to the Zen One plant, which included the administration of taxes associated with manufacturing and import processes and VAT on finished products.
  • We provided tax liability management services to ITL, including VAT associated with marketing services and ensuring compliance with local standards.
  • We worked on preparing tax plans related to contracting contracts to Saeed Abdullah Awad Al Qahtani General Contracting Corporation and providing support in the administration of value-added taxes and withholding tax on foreign suppliers.
  • The customer satisfaction rate for Al Othman Tax Service exceeds 90%. This is a strong demonstration of the great trust that customers give to the Company. It is in itself a great success for Al Othman and its team.
  • Al Othman’s legal team has also completed more than 87% to 88% of the tax disputes offered to him. This is an exceptional proportion in this area.

These percentages are among the highest in the market, and are a great success certificate for the company, enhancing its reputation and proving its high efficiency in dealing with tax compliance and resolving tax disputes.

Conclusion

All individuals, companies, and residents must abide by Saudi Arabia’s applicable tax law and issue a tax declaration for submission to the competent authorities to avoid incurring tax offenses.

If you need a tax lawyer or tax consultant, you can contact us now to seek legal advice from Al Othman’s team of lawyers and consultants, they are always ready to assist.